ALTERNATIVE HR PERSPECTIVES AND VALUATION

By Ganesh Shermon ©

PART A: EMERGING ROLE OF HRM IN THE 21ST CENTURY.

A RESEARCH INITIATIVE

HR Folks International, a virtual knowledge organization on the web, recently

conducted an India corporate based research covering a large spectrum of
companies that represented a wide span of industry segment. The purpose of
the study was “To evaluate the consequences of the knowledge economy on
the HR function with a particular reference to career management”.

ORGANIZATIONAL EFFECTIVENESS

Organizational effectiveness continues to be an unanswered inconclusive

question given changes in the business economy scenario. Many alternatives
and measures are available, all of which are right to measure corporate
success or failure. However none of the measures offers a conclusive answer
to the vexed question. What makes an organization effective?

Asset size?
Customer base?
Market capitalization?
Served markets?
Global presence?
Financial ratios?
Growth rate?

Or in the context of the web is it the community space, the data warehousing capabilities,
the networking capabilities, advancement and strengths in the digital world etc?
The McKinsey debate published, in the McKinsey quarterly, a scholarly
debate between a consultant and a teaching faculty that brings in the wide
variety of perspectives and logical reasoning on “big” as one of the key
indicators of survival or being networked and effective being the other.
Which of the two organizations would survive? The classical question was
Market Capitalization vs Customer Interaction. Is big better?

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The emergence of a new organizational model in our opinion is inevitable. The
Intellectual Company of the new millenium. What makes this new
organization so different from others?

1. Strategy based on intellect. The organization primarily revolves around

its people and their capabilities. Its strategy is purely a function of
utilization of its people and leveraging it through a business proposition.
2. Functional / divisional / matrix. Or Networked, Chain, Link, Circle, Web?
The search for a new structure, a new way of doing and getting things
done continues. What would make the new age individual work, perform
and obtain results?
3. Race for growth on known areas of competence & urge for divestment
from unknown or little known areas is a sure shot syndrome of the
current era. Nobody wants to be in a business that they either know little
or that can be outsourced.
4. “People - systems” against “systems-people” is a predictable change. as
companies get more and more systems integrated with a enterprise wide
solutions the danger of a distance between the individual and the one
large monolithic system is a grave possibility. Distancing people away
through a tightly packed system that allows for little flexibility for
empowerment or handling customer service requirement on a mass
customization basis would bring in unknown agony.
5. New marketing models: E-commerce is the most happening. Every
business is working on a B2b or B2C solutions. Each of the business
enterprise are making efforts to change the way they work and bring in
more revenues. Changing the business model through the web is not good
enough. Changing the way we do business by increasing the share of the
mind and the wallet of the customer is key. B2B e-commerce business is
expected to soar from $ 43 billion in 1998 to $1 trillion by 2001,
dwarfing the B2C market, which is projected to grow from $7.8 billion to
$ 108 billion during the same period.1
6. Competitive advantage through management of people. Using principles of
KM to make every individual bring in a value adding perspective to their
jobs as they discover their intellectual advantage.

1 AMR Research, Inc. Competing in a Customer Driven Economy. Fortune. October 25,1999.

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EMPLOYMENT ISSUES: CONSEQUENT DISCONTINUITIES

Career planning is perhaps an oxymoron? It is a contradiction in a business scenario wherein

individuals are expected to cannibalize each other by innovating and counter innovating.
Employees would make their roles self perpetuating by generating new ideas as they keep
working on their old ones. As they come up with a new idea they transfer their old one to
another and move on to the new, unknown area. In this context, perhaps, careers do not
make a lot of meaning. The unknown area could be in another location, company or place.

Learning divestment & knowledge acquisition implies that as we learn more we realize the
need to alter and unlearn several assumptions of the past. Seeking pure knowledge
necessitates divesting ourselves off preconceived notions, stereotypical attitudes and make
believe perspectives on right and wrong.

Specialization and specialization is another dimension to study. If the organization of

tomorrow implies knowledge intensiveness does it indicate greater specialization and depth
of what is known. The question is whether more and more employees would seek vertical
knowledge focus as against a horizontal spread. Specialization indicates knowing more and
more of less and less. Both the individual and the organization would find management of
specialized knowledge difficult to handle given inevitable insecurities that go along with it.
Or the fact that peer understanding of the specialized knowledge would by itself be
limiting.

Intellectual property: Individual or organizational rights are a classical ethical question? As

people create, innovate and make new things happen or while they perform their jobs
intellectually generation of ideas and consequent patents are inevitable. Who would take
ownership for the patent? Why would a question that until today did not have a dilemma
suddenly emerging to become one? New knowledge always starts with the individual. An
individual’s personal knowledge is transformed into organizational knowledge valuable to the
company. The organization cannot create on its own without the initiative of the individual
and the interaction that takes place within the group. Transition from an individual to an
organizational knowledge many mean articulating mutual benefits and rewards that make
creation and sharing easy to manage.

Remuneration policies of the corporation are yet another change oriented

HR policy perspective to study. As people compete and perform in a
competitive environment, where individual contribution is more measurable
than ever before skewing remuneration and rewards in favor of the
individual is more than necessary. Compensation is another way to answer the
ethical question dilemma of intellectual property. As individuals perform and
as they realize their value to the corporation they would demand more for
their contribution. Offering ownership stakes is a way to address this
problem. Creating a program that links contribution to long term rewards and

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a proportionate risk-reward ratio would motivate employees. Bringing in
“Intrepreneurs” 2who have taken ownership responsibilities for their actions
is a viable alternative.

Predicting the future HR Scenario

Available options Vs Research Experience

A) Empirical model based on secondary research only.

B) Study of other economies in an advanced stage, or
C) Researching the leaders and Top Management of businesses in India managing the
enterprise of tomorrow by using both the primary and secondary research tools.

A Research Experience

•Objective

1. CEO and top management add a futuristic perspective on HRM issues in the first decade
of the 21st century
2. Relevant influencer of business direction to present their perspective

Issues addressed

1. Critical People Success Factors in the New Millenium

2. Career Definition in the New Millenium
3. Motivation for Organizational Effectiveness
4. Knowledge Management Strategies

Methodology

•Sample of CEOs and top management of top Indian corporate in India in

1. Emerging industries
2. Global corporations
3. Indian giants
4. Technology focused industries
5. Service sectors

• Open ended 4 point search and content analysis from published materials, magazines,
books and company brochures, including a questionnaire for select participants
administered: 1999 Survey Content feedback Methodology.

2Pinchot, G., III. 1985. Intrapreneuring: Why You Don’t Have to Leave the Corporation to Become an Entrepreneur.
New York: Harper & Row.

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• Frequency distribution of responses plotted & key trends identified. A predicator model
of reading between lines on what are emerging to be likely issues for the future as seen by
the top management of the companies. Is there a pattern or consistency to what is being
predicted as the issues concerning HRM professionals for the future?

The Information Search

1. Please articulate the critical “people success factors” for organizations in the decade
2010
2. The 20th century employer sought “career employees”. What in your opinion, would be
the trend in the decade 2010?
3. What would you consider “Motivation Theory 2010” for organizational effectiveness?
4. In the knowledge era, what are the “Knowledge Management Strategies” that
organizations should adopt?

The Research Results and Analysis.

A) Critical People Success Factors (Not Rank Order but greater frequency of inputs)

1. “High tech - low touch” comfort employees

2. Blend of “thinker - doer” competency in every individual
3. Creativity and solution providers
4. Self-managed stress and ability to handle business weight
5. Strong “value based” leadership
6. Balance between “specialization & general management”
7. Compelling “vision & leadership”
8. “Cross cultural” adaptability
9. “Quick responses” to unprecedented change

B) People Success Generic Statements (Important but not a pattern)

1. Managing enterprise “holistically”

2. “Environment relationship” managers
3. Culture of openness tending towards “informality”

C) People Success Characteristics/Attributes and Trends

a. Multiple skills and Versatility - 64%

b. Teamwork and Group Work - 36%
c. Competency Development - 64%
d. Value based leadership - 27%
e. Technology comfort - 18%

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*Multiple responses from each respondent hence total is not 100%

D) Career employment trends (Consistent Pattern of Responses)

1. Knowledge worker & knowledge careers

2. Low settling in time for peak performance
3. Short term service providers like consultants & freelancers
4. Immediate hits rather than long-time loyals
5. Frequent internal transfers - flexible employees
6. Career employees may not be available

E) Most sought after employee in 2000 - 2010

a. Career Employee with Long Term Perspective - 18%
b. Knowledge Worker and Intensive Intellect - 45%
c. Consultants/Freelancers - 55%

* Multiple responses from each respondent hence total is not 100%

F) Motivation theory 2010

1. “Profit sharing” through ESOP: Owner Managers

2. Organizations will endeavor to enhance “quality of life” beyond work
3. Satisfying “learning needs & self actualization” while at employment
4. Delivery based “extravagant pay”
5. Enhance “employability” and specialized skills and competencies.
6. Significant “empowerment” and Freedom to act.
7. Company environment that recognizes the need for “personal growth”

G) Motivate through
a. Personal growth 64%
b. Significant empowerment 45%
c. Competency training 27%
d. ESOP 18%
e. Lifestyle management 18%

* Multiple responses from each respondent hence total is not 100%.

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H) Knowledge Strategies suggested by the CEO/Top Management
1. “Flexibility” rather than legacy systems
2. Become a “model learning organization”
3. “Mentoring” for knowledge workers
4. “Performance conflicts” tension through internal competition
5. Extensive “environmental scanning” for internal knowledge
6. Storing “corporate knowledge” & dissemination across the organization
7. “Investment” in data collection, storage, retrieval & processing of organizational
knowledge
8. Systems for “faster access” of organizational knowledge
9. Dismantling organizational “silos” & organization-wide sharing
10. “Online transaction” based information flow
11. Managing a “continuous innovation” streak
12. Creating organizational “structures for knowledge acquisition”

I) Knowledge Strategies (Prioritization of Thinking)

1. Investment in systems - 82%
2. Organization Learning - 72%
3. Environment Scanning - 45%
4. Innovating Culture - 36%
5. Online Knowledge Capturing - 36%
*Multiple responses from each respondent hence total is not 100%

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J) Summary of our Findings and Conclusions: HRM 21st CENTURY
1. Multiple specialization
2. “Team” as an inevitable unit of accountability
3. “Technology friendly” employees
4. “Competency” will determine employment
5. “Value based leadership” for cutting edge
6. “Consultants & freelancers” would prevail over full time employees
7. “Merciless meritocracy” as a value over loyalty
8. “Delivery based pay systems” as the compensation trend – effectiveness of
contribution & consequent value to the organization, funds employee pay
9. “Quicker time” to market new ideas as an employee attribute
10. “Employee seen as an independent system” accountable for own development as
well as organizational results - significant empowerment as a consequence
11. Company culture must create a “climate” for enhanced learning
12. “Knowledge work” will form a significant part of the employment economy
13. Competing strategy will be governed by environmental scanning, knowledge
capturing & retrieval systems, and knowledge dissemination systems
14. “Dismantling all silos” that come in the way of enhancing knowledge based
competitiveness will be an organizational priority

PART B: 21ST CENTURY INITIATIVES: STRATEGIC HUMAN CAPITAL

MANAGEMENT3

(a) Renewal program on the vision and values of the corporation conducted across the
corporation. Help people re experience the organizational dream.

(b) Redevelop, communicate and execute a change management program to understand

the implications and challenges of the New World, the knowledge employee and
consequent impact on the organization and HR processes.

(c) Regain top and influential management commitment, be a part of the top
management and make the change program effective.

(d) Renovate and help share the vision and spread it across the organization, winning
involvement and commitment. Arvind implemented a change management program
titled “GLOBAL ENDEAVORS: ARVIND 2000”4, to make this happen holistically.

3 Reproduced from “Applied Intellectual Capital Assessment Base” © and “AICAB” © copyright of Ganesh Shermon,
Vinayak Kamath, Neelesh Hundekari and Sanjay Roychowdhury.
4 Shermon.G. 1994-96. Global Endeavors: Arvind 2000. A series of Change Management Workshop covering over

1000 management staff over a period of 3 years.

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(e) Rebuild a communications network that works and say more than what has ever
been said before.

(f) Restructure to bring in a boundary less, seamless organization that works for all.
There is enough for an employee to do everyday. Let not getting things done
through a simple structure is yet another milestone. WM-data has a policy to not
allow any unit with more than 50 employees. This creates sense of family and
belonging that in turn increases trust and knowledge sharing.

(g) Restate organizational priorities and goals in the context of the economic
turbulence. Dow Chemical USA has put all its 25,000 patents into a database,
which is used by all its divisions to explore how existing patents can gain more
revenues. This experience is now being transferred towards brands.

(h) Reward programs of the corporate should make collective benefit of information
usage become real. To encourage knowledge sharing organizations must align
compensation, bonuses and other reward programs to the advantage of the group
effort.

(i) Rework core HR systems and policies to facilitate its adaptation to the dynamic
people – business scenario. Oticon Denmark has created an organization with no
job descriptions, role clarity, fixed time or work rules, but work entirely on a
project and performance basis.

(j) Redesign workplace to help knowledge people work in an integrated connected

architecture. Help collection of tools, techniques, and services to be accessible
and easy to handle. HP has built offices as open spaces with no partitions or
partitions at eye level. This increases sharing of tacit knowledge and values.
Satyam Computers and Enterprises have built literally a romantic TechNet Park
for its knowledge employees built over several 100 acres. The workplace, the
conventional office has lost its significance at Satyam5. The workplace of the
company is today a home for its employees, who in any case are treated like
partners and value creators and for whom visiting their place of work, is fun.

(k) Reinvent competencies and for it to be effective continue to change as radically

as the business itself. It is critical for the HR function to make learning happen
at several times the pace as obsolescence. This is fundamental to remain
competitive.

PART C: COMPETITIVE POSITIONING OF HR IN THE 21ST CENTURY6

5 From the author’s personal visit to the Satyam Enterprises sprawling campus at Hyderabad. A true visionary’s dream

location.
6 Reproduced with permission of the copyright owners of “AICAB” ©

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Several HR initiatives in addition to challenges raised in the article
mentioned below are necessary for managing the knowledge workers. The
list is definitely not exhaustive please!
1.1 Bring down wage disparity between levels. Reduction of the blue
collar is inevitable and a dramatic shift to new age workforce
would happen.
1.2 Hiring profile would undergo a dynamic shift. The new breed of
talent would need innovative form of socialization and adaptive
procedures.
1.3 Bring in new forms of training and behavioral interventions to
manage the competitive fallout of the workforce dynamics.
1.4 Flexibility of company culture and practical policies for home
office, flex working are real and happening today.
1.5 Compensation and rewards have to be individually charted
depending on the intellect brought in by the employee along with
the time frame for its delivery. The company should have reward
programs on a group basis for knowledge workers. The
Performance Appraisal system must have built in rewards for
system creators.
1.6 Time horizon for managing careers would radically shorten.
Corporations should not turn desolate and despondent. This is
the way things would be. Our retention strategy should be of the
KNOWLEDGE and not the person per se, lest we miss the woods
from trees.
1.7 Strategic structures would become real and dynamic. Flatter,
directly managed entrepreneurial style would become inevitable.
Intellect cannot be managed by a bureaucratic structure and
policy oriented mechanisms.
1.8 Knowledge based HR products should become available for people
management. HR problems would need to be solved electronically.
Information access, easy and friendly, is critical.
1.9 Cultures should outlandishly become OPEN AND
TRANSPARENT. A knowledge sharing culture needs to become a
way of life. Knowledge mapping skills, developing human networks
of complementary skills become essential.
1.10 If we don’t tell them somebody else will.

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PART D: A CASE STUDY ANALYSIS7

The case study attempts to address the following questions:

1. What is the role of HR in the 21st Century?

2. Are there inevitable changes in the business management scenario that HR should take
cognizance of and act upon it now?
3. How can HR use technology to its advantage and make “Human Touch” happen?
4. What new forms would HR take in the 21st Century?
5. What is HR preparedness to meet with changes and consequent challenges?

TWO ALTERNATIVES HAVE BEEN PRESENTED:

ALTERNATIVE 1: THE CASE STUDY THAT ARTICULATES ONE MODEL OF A TYPICAL

HR ORGANIZATION OF THE FUTURE.

ALTERNATIVE 2: THE ARVIND MILLS LIMITED HR FUNCTION REORGANIZATION “6

R STRUCTURE” THAT INTEGRATES THE HR FUNCTION WITH OPERATING
MANAGEMENT AND KNOWLEDGE MANAGEMENT BASICS.

ALTERNATIVE 1

WHAT HAPPENS WHEN CALVIN GROWS UP?

TOO HARD TO HANDLE NOW!

The formative era of the HR service provider is long over. Having moved on,
the HR function now typically consists of resource groups which cater to
RECRUITMENT, MANPOWER PLANNING, TRAINING & DEVELOPMENT,
INDUSTRIAL RELATIONS, FACILITIES & ADMINISTRATION,
COMPENSATION & BENEFITS and WELFARE and EMPLOYEE HEALTH
AND EDUCATION SECTIONS. More than just being a maintenance function
its has been increasingly pressurized to change the way it works and has
indeed taken on different and more challenging roles in keeping with the
times.This has been an outcome of the changes in the business environment
and in the commercial and economic infrastructure that have impacted
corporate in aligning themselves. The last decade has seen corporate move
from geographical and fiscal channels of distribution to e-commerce, Tele-

7 Case Prepared by Mohit James keeping an altered HR folks Model in perspective.

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marketing, and satellite channels of promoting products. More number of
mergers, acquisition and strategic amalgamations in the recent past have
occurred than in the rest of the century put together. The number of e-com
industries have gone up and it is expected that over70% of all commercial
transactions globally shall be transacted through the net. Changing and
challenging the internal mindset has been and will continue to be a task at
hand for most HR professionals and functions. On the outset of the times
that have arrived, the Human Resources Function has moved to being a
strategic partner to the business as a competence building specialist
function and is indirectly impacting the growth and performance of several
businesses around the world. Inspite of these influences, however
quantifiable they may seem to the organization's business performance,
expectations from the HR function have continued to rise in myriad and
complex ways. It may seem a harsh reality to digest that time and time again
the HR function has been called upon to prove itself and re-establish its
significance and credibility to the business.

The below mentioned case deals with the state-of-the-function situation

that faces most HR departments today. Is the time right? Irrespective a
close observation of the changing trends in employment practices,
Information Technology and its impact on HR systems will tell us that not
only the mundane maintenance and administrative functions are being
serviced through high-tech computers but are also impacting decision making
processes. In the bargain through Comprehensive HRIS and ERP systems and
software several effective HR outsourcing models are emerging. Infact
outsourcing is no longer confined to administration, payroll, facilities or
training. Intranet/Internet based models with the entire HR Value Chain
from manpower planning to exit, including career planning and competency
profiling could be outsourced.

What will be the role of HR in the coming millenium? How will the HR
Function establish its equivalence and equity as a function at par,
contributing to the bottomline? Will it shift from staff to line- is this
transition possible, an unthinkable act, paradigm busting contrivance. Can the
business absorb the impact of the HR function, which has been a support
service provider, actually adding to the bottomline. Does it need to
piggyback on the business it is servicing currently or should it branch out as
a business itself.

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Human Resources- A PROFIT CENTER.

Black & co. a multi-business conglomerate that has interests in engineering,

telecommunication and home appliances business has a well-established
Human Resource function that works at a centralized plane. The business has
also grown over the years with restructuring and better and latest
management practices being initiated by the organization under the able
leadership of the CEO. As part of the strategy to boost management think,
it was critical to initiate new management style, which was in sync with the
moving markets and trends in an otherwise traditional business. This was
done by hiring top management from various benchmarked multi-national
companies, initiating better management practices as far as managing the
business was concerned. Human Resource processes formed a key anchor in
this strategy for transformation. The Head of HR, a dynamic and well versed
professional with experience in managing HR in a varied and global
environment was a key member of the management team which steered
these changes. The HR team consisting of professional HR experts slowly
and surely worked on changes in the HR policy, systems and practices. The
HR organization was classified in the standard process mould and consisted
of separate sub-functions. Manpower Planning & Resourcing that created
high-end recruiting systems in line with global practices, helped in
positioning Black & Co. as a competitive organization for professionals to
build a career in and eventually placing itself as a top employer in the
industry.

Compensation was managed effectively by making the structure of the

compensation in line with the markets and being competitive through tax
effective payments, capital and fringe benefits, performance rewards, etc.
This team for various regions around the world also handled management of
ex-pat policy through remuneration.

A management and organizational development team ably managed six world-

class training centers through active learning processes and a focus on
competence and skill enhancement programs. This was fed- in with a
performance evaluation system ably linked with business needs based on
human- skills intensive platform.

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The employee relations' aspect was managed effectively by bringing in an
egalitarian approach and establishing a structure for creating an empowered
workforce. In toto, it was an enviable HR function with the state-of-the-art
policies, systems, procedures and practices. A strong sense of values and a
definitive direction also provided the required balance. Through the support
of the CEO and under the leadership of the Head of HR the function moved
from milestone to milestone creating on the way several creative
breakthroughs in the field of organizational management and Human
Resources. Several of the concepts created through projects were published
and the creators of the same acclaimed for the quality of thinking and
contribution made to the HR function at large along with the organization
itself.

Simultaneously, the HR team at Black & Co. also underwent their share of
honing experiences through exposure to various functions and projects in HR
related areas impacting the business directly. These included business
restructuring and re-engineering, rightsizing, compensation restructuring,
intellectual capital management, career planning and potential mapping,
management of cultural issues with respect to mergers and acquisition, etc.
All these activities and assignments were also popularized amongst the
corporate intellectual community through well published articles and papers
at conferences and symposia. Given the breadth and depth of experience,
the team members exuded confidence in their ability to handle all and
sundry assignments that impacted organizations from a people point of view.
There were several other institutions including professional management
Council chapters, educational institutions and 8 corporate eagerly wanting to
learn and be a part of this influencing conundrum.

The scheme of things as they stood seemed Utopian, come the recession,
the industry demanded the business to defocus from long-term institution
building and value creation processes for the future to survival. Tremendous
pressure resulted in reduction of manpower and resource allocation to
activities envisaged and perceived as non-value adding at Black & Co. At this
juncture the management committee was convened to identify processes and
functions which fell in the Schindler's List. HR was also one of the functions
which came under heavy weather for downsizing given its changing
usefulness in its current form owing to changing business conditions and

8 HR folks, www.hrfolks.com

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expectations.. The decision was kept on hold as part of the management
committee was divided in its views.

Some opined that HR was an integral part of the organization and was
needed to provide the sundry services that the key line functions could not
spare time for. Others looked at an option of outsourcing HR to an external
agency with the help of IT tools and interfaces already available in the
market for a price. The CEO at this point seemed at the end of the tether,
although being a firm supporter of HR practices and approach had a bigger
responsibility of sustaining the business and formulating strategy and plans
for survival.

The Head of HR was also involved in the process of decision making. The
young, inspiring HR leader had his own share of dilemmas. The team which
was created from scratch, which now was the pride of the industry and the
HR fraternity, was nurtured with pain and patience and held great scope and
promises for leading in the future, faced the threat of disintegration and
subsequent extinction. The HR Head put up a proposal to spin off the HR
function as a profit centre that shall fend for itself in as far as generating
revenues to sustain its position and those of its members. All he looked at
was that the Internet and the Web was an enabler.

As a profit centre, the HR head envisaged the function would actually be

able to add to the bottom line of the organization and at the same time
provide better internal services to the organization. This, he said, would be
done through the translation of learning and experiences gathered while
servicing external clients. The HR team backed up this idea although there
were some hard liners who insisted on keeping to the internal service
provider role of HR confirming their fear to tackle the future and situation
ahead. The enthusiasm of the many actually reduced the voice of the
dissenting faction to a whimper. Midnight oil was burned. A business plan saw
the light of day. The proposal consisted of a set of services being provided
by this new-formed unit that would contribute to the organization at large.
The laundry list was impressive, the medium as decided to promote this new
profit centre was indeed the Internet and other IT tools and linkages
available to enhance business performance.

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The HR profit centre looked at some of the following services that they
wanted to concentrate on:

CONSULTANCY
COMMUNICATION
RESEARCH
RESTRUCTURING
TECHNOLOGY PRODUCTS
ONLINE EDUCATION AND SELF LEARNING
HR SERVICES AND OUTSOURCING
LEGAL SERVICES
PUBLISHING
TRAINING & EDUCATION
CAREER SCHOOL
HR EXCELLENCE CELL
EVENT MANAGEMENT
LEADERSHIP DEVELOPMENT
RECRUITING AND SOCIALIZATION

The idea was mooted in front of the management committee and with
reluctance the management committee decided to give this chance to the HR
function at Black & Co. The time frame to do or die was 6 months. The HR
team was to prove its capability and mettle during this period. The team
worked with vigor and passion and did wonders, obviously the goodwill and
name created through its earlier endeavors helped. The industry contacts
and forums supported the initiative and within a short span of time results
spewed forth. The quality of internal services also improved but due the
business orientation that came into being through dealing with external
agencies it was matter of act and exacting to requirements and
specifications. That extra mile although was missed somewhere along the
line. The members of the management committee also noticed this along with
a large number of employees in the organization.

DILEMMAS ARISE: 9

9Responses to the Case and its Analysis may be forwarded to www.hrfolks.com of the HR folks International and
would be responded to by Mohit James.

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Should the HR Function at Black & Co. launch out on its own and make a Black
& Co. one amongst the many in its list of increasing clientele?

Should the HR function as a gesture of loyalty to Black & Co. and the
opportunities provided by it to give the HR function the much required
breadth and depth of exposure override its profit motives and concentrate
more on Black & Co. and its needs rather than the profit centre?

ALTERNATIVE 2

PART E: HUMAN RESOURCES SYSTEM AND SUB SYSTEM10

THE ARVIND MILLS LTD (AML) KNOWLEDGE MODEL FOR THE HR STRUCTURE: THE “R”
STRUCTURE.

The current HR sub system model includes hiring, training, compensation,

performance, career planning, potential appraisal, succession planning,
employee relations, administration and HR information system while
effective linkages are possible the process is not conducive for integrated
effectiveness.

The Human Resources function has often been termed a staff role to
service business needs. As an area of functional competence, there is a
defined value chain in the HR function. This value chain has to focus on both
value creation and delivery to function effectively as a responsive service
organization.

In the context of AML, given the business needs of today and times to
come, the priorities for HR are as follows:

To hire top talent from business and technical schools and the industry
to meet the ambitious projects undertaken
To groom the talent for future needs through entry-level hiring,
socialization and training
Use the Management Training program to build leaders for the
corporation

10 Reproduced with permission of The Arvind Mills Ltd. Human Resources

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 Facilitate creation and nurturing of a culture that performs and makes
people enjoy working
Design and execute competitive pay, individualized for performance
programs, perquisites, fringes & benefit programs
Offer employees a life style that befits a quality of life for self and
family.
Build long term Industrial relations with the unions
Make internal hospitality services productive and performing
Offer relevant and effective training and development programs,
including introducing self learning programs
Design and execute reward programs for individual & team based
breakthrough efforts
Facilitate long term settling down of employees, including designing
career plans and life goal satisfaction facilitation
Ensuring a harmonious, effective and productive work environment
Design & implement systems for facilitating employees for various
requirements on the job

THE HR SYSTEM AND SUB SYSTEM MODEL11

A need was felt by the organization to integrate the HR sub systems and
functional specialization to enhance its integrated effectiveness and help HR
function synergize with the overall corporate strategic planning goals of the
company. The proposed “R (Resourcing) Structure” was based on the
following principles:

Link corporate strategy and HRM strategy holistically.

Create a structure that links strategy and functional goals of a
department.
Make this structure flexible enough to change and absorb changes
including facilitating changes in other functions.
Make HRM undergo as many iterations and changes as would a business
strategic plan given changing business plans and objectives.
Help HRM understand the dynamics of a business enterprise as against a
traditional understanding of a policy and paper run function.
Make the HRM function into a resourcing activity as against an
administrative function responsible only for reaction to a problem.

11 The Arvind Mills Ltd.

© www.hrfolks.com
Resourcing meant planning for people in advance as a corporate would plan
for finance, materials, power etc. in advance.
Involve HRM professionals in corporate strategy formalization programs
including its review and execution.
Train HRM professionals on understanding the business and its functions
through education and job rotation.
Create formal task forces and group meetings involving operations and
HRM to work on problems and issues together.
Eliminate line vs staff demarcation and make HR goals deeply entrenched
with the overall business and profitability goals of the company.
Managing facilities in a state-of-the-art manner by integrating all sub
components and systems.
Ensuring ongoing employee development to meet the challenges of a
growing organization
Designing robust communication & corporate relations systems
Undertaking all the above activities through researched inputs and
implement OD interventions as appropriate.
Help HRM identify products and services that can be delivered to the
customer with quality, consistency and long term credibility.
Make HRM systems adaptive to the needs of a Multiple Business Unit
(MBU) scenario where the needs of one business may be different from
another. Customize solutions from one unit to another.
Ownership to an HRM issue should rest with the immediate superior and
HRM should be available to support their effectiveness.
Make knowledge management of HR process, system and experience easy
and user friendly.
Focus on Resourcing, Research, Relations, Rewards and Retreat with
Results as the end goal or destination.

HR effectively creates a learning culture when it fulfills the following

conditions:12

1. Common concern for people that takes the form of an equal concern for
all stakeholders, customers, employees, suppliers, the community, and
stockholders.
2. A belief that peopl can and will learn and value learning and change in its
own right.

12 Schein, E.H. 1992. Organizational Culture and Leadership. San Frascisco, CA.: Jossey-Bass.

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3. A shared belief that the world around them is malleable, that they have
the capacity to change their environment and that ultimately they make
their own fate.
4. That there must be some slack, some time available for generating
learning with an equally diverse set of people to interact and learn from.
5. A shared commitment to be open and extensive in communication by
telling all and telling the truth.
Fig: A conceptual framework of the 6R structure is as given below:

Linkages for Effective HRM

Strategic Human Resources Corporate Strategic
Management Group: Planning Group
Knowledge Management

Formal Plans & Strategy

Retreat Researc Formulation

h Relatio
ns
Resources Rewar P l
Recruitment d Strategy
R ti Implementation
Actions not anticipated
Relations
during strategy formulation Communications
but that end up as part of
the actual strategy of Strategy of Firm
firm and for which firm
action plans should be
drawn for implementation.

6R STRUCTURE – HUMAN RESOURCES MANAGEMENT

The 6 R Structure covers the overall HRM function with a focus on

knowledge management and resourcing for organizational needs.

1. Resources: Recruiting/Remuneration
2. Rewards
3. Relations: Systems/Hospitality/People
4. Research and Restructuring
5. Retreat and Development

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6. Relations: Corporate Communication.

Delivery System of HR
Value delivery mode

Value

Th nte

Th rv
I

se
ro llec

ro ice
delivery

ug t

ug
Co

h
ns

system
st i
en
cy

Benchmarke
Quality
d/Reliability
Cu
st
Value Creation

om
iz
at

Individualiz Applied
io
n

ed knowledge
Co
nv
nie
e

Unique and Ownership

nc
e

rare

Fig: To execute the above priorities, the 6 R structure is being implemented

keeping the “Delivery System”13 outlined here as a conceptual backdrop

7. HR-Knowledge Management: The integrating role-played by HR-KM

amongst all of the R Structure.

R 1 – Resources
The Role of Resources is identifying, selecting, placing and rewarding the
human resources needed for the organization. Resources has two sub-
sections

R 1a – Resources Recruitment
The role of Resources Recruitment is to identify the skill requirements for
current and future needs, to identify appropriate sources for fulfilling such
requirements, selection and placement of an appropriate number and mix of
professionals, operatives & trainees. The sources could be internal, lateral
hires or entry-level hires.

13 HR Folks. www.hrfolks.com

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Special emphasis lies in search for key positions, entry-level hire for long-
term growth and succession planning.

R 1b – Resources Remuneration & Rewards

Pay and benefits design and administration is not a new skill. However, in a
competitive era, when budgets are shrinking, available monetary resources
have to be stretched to deliver ambitious outputs. Another characteristic of
today’s environment is that the “one size fits all” paradigm has been
rendered obsolete in the marketplace. This is true even of employee reward
programs, which will have to be tailored to facilitate the achievement
objectives of various endeavors in all functions and businesses of the
organization. Resources Remuneration & Rewards is an arm that will
facilitate the above objectives. The priority areas for this group are
budgeting & monitoring of actuals, appropriate salary fitment through
position evaluation benchmarking, creation of contemporary benefits policies
& administration of the same, and international compensation & benefits
management.

R 2 – Relations People
For an effective organization, the critical inputs required are harmonious
relations at the workplace, achievement of ambitious productivity norms,
tight manning, manpower availability, and maintenance of a good work ethic
at the shopfloor. This involves setting of right norms through inter-unit &
inter-department benchmarking, understanding employee needs motives &
expectations at the grassroots level, facilitating a good work environment,
and defining & maintaining discipline. The role of Relations People
encompasses all this. It goes beyond a traditional industrial relations activity
towards adapting contemporary management science at the grass-root level.
For our geographic needs of the textile businesses, Relations People
resource group has two arms:14

R 2a – Relations People Region 1

This arm caters to the needs of Factory 1, Factory 2, newly acquired units
and city garmenting factories. Within this arm there are resource
professionals looking after D1, D2, D3, D4 & D5 and the group companies in
garments, air-conditioning and refrigeration, financial services, telecom,
entertainment, engineering and realty. The role encompasses identifying,

14 Improvised “Value Delivery System” created by Sanjay Roy Chowdhury of the HR folks International.

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developing, maintaining and concluding relationships with both the internal
and external environment. The relationship managers become single point
contact with the communication environment. Their job is to build long term
partnerships with all influencing segments of the business scenario in a
constructive sense.

R 2b – Relations People Region 2

This arm caters to AML & APL F3, and Arvind F4. As above, there are
professionals for Business 1 (B1), B2, B3, B4, B6 and B7. This is an off site
management job where external environment would also include community
development and township planning and maintenance. Health, education,
family planning, self-employment, equality and fairness amongst sex,
management of diversity would be an important role.

R 3 – Relations Systems
Getting the best of people to work at competitive remuneration with the
best technology sounds the ideal recipe for an effective workplace. This
overlooks some basic needs and has inherent fallacies. Some questions would
lead us to the intended line of thinking. How does the workplace look? What
facilities are available for communication, are they reliable? What about
cafeteria and pantry services? How about office equipment, are they
maintained and available at convenient locations? What about drinking
water? Moreover, housekeeping & security?

However, these are always taken for granted, are they not? These factors,
termed as hygiene factors, can make or break the work environment
depending on the extent to which they are available. All these services have
an attached cost, and a potential nuisance level. Managing these services for
maximum service levels at low costs is as challenging as managing the
commercial customer service wing of any organization. The role of Relations
Systems is to design services, create systems for execution and
management and control the cost of these services.

R 4 – Relations Corporate Communication

Two most important processes in any contemporary organization will be
communications and networking. Designing of Systems, interventions and
processes that will facilitate communication and networking is a crucial HR
activity. The role envisaged of Relations Corporate is managing both the
external and the internal communications & networks. The former involves

© www.hrfolks.com
media relations, relations with all external stakeholders and managing our
website. The latter involves employee communications, Intranet, in-house
magazines & communiqués.

R 5 – Retreat
One of the signs of a successful organization is the rate of growth of all its
constituents – strategy, systems, competencies and organizational
capabilities, technology, skills, service levels, responsiveness, quality, and
resource productivity. It is easy to say that good people will make this
happen. To ensure such growth, the organization has to invest in the growth
and renewal of people. As stakeholders and the vehicles for an organization’s
success, the organization owes it to its employees to invest in their growth
and learning.

The retreat function has been set up with this objective. Some of the
activities envisaged are training, in-house and outbound, team interventions,
on-the-job learning, learning booklets and handouts, competency mapping,
and performance management.

R 6 - Research & Restructuring

A good management relies on information-based decision-making. Every management
structure must therefore have an arm, which will research various aspects of
competitiveness in the given area of operations. Research & Restructuring is a resource
group formed to provide information on people aspects for decision making on people fronts.
Research could be both external and internal. The envisaged role is presenting reports on
climate & environment, HR challenges & opportunities, and benchmarking HR practices. The
other role of this resource group is restructuring – designing organization structures on a
zero-basis and benchmarking structures between units & departments.

Resource Integration of HRM: Knowledge Management Group.

The linking pin to all of the R Structure is the HR – KM activity. A group of members
identified to performed the HR-KM function with a responsibility to facilitate HR
knowledge creation, management, retrieval, storage, documentation and dissemination. Their
role extends beyond the creation of a system or documenting paper work or activities. The
purpose of HR-KM is to make every organizational member appreciate the necessity of
creating and consolidating best practices, day to day learnings, people critical experiences.
The use of Intranet was but a first step that HR-KM delivered at the company. The HR-KM
group was expected to work closely with line and operating management and make aware the
need for managing knowledge. The KM framework helped operating management understand
the criticality of holding on to intellectual information in the context of employee attrition
or the ever changing customer expectation and demands. In the 21st century HR would be
rechristened as HR-IT-KM all put into one.

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INTEGRATED “R” STRUCTURE IN EVOLUTION15

Region –
Remuneration &
Recruitme

Relations Region – F3/F4

Resources

Human Resources:Knowledge
Mgmt Relations
Retreat

Relations Commn.
Research &

15 HR folks. www.hrfolks.com

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“Making the simple complicated is commonplace; making the complex awfully simple is
creativity. That is the knowledge world. There is something for all. Our Utopia of corporate
collaboration is creating an organization of human capital that performs at all times”.

O2K - HR'S ANSWER TO THE Y2K PROBLEM16

21ST CENTURY VIRTUAL

CORPORATION EDUCATION

HR
NEW HR
CONSULTANCY
HR EXCELLENCE
MODEL GOVERNANCE
CORPORATE
ETHICS
ORGANISATIONAL MANAGEMENT
NEW FORMS OF SCIENCE REVIEW
RESEARCH
WORK
ORGANIZATION TOP
MANAGEMENT STRATEGIC
KNOWLEDGE STYLE STRUCTURES
CENTRE CHANGES

16 O2K MODEL– is the copyright of H.R. Folks Pvt Limited -“ORGANIZATION OF 2000”

EMPOWERM
COMPETENCY CULTURE GLOBAL
© www.hrfolks.com
PROFILING COACHING BEYOND 2000 BENCHMARKING
ENT

NEW FORMS CORPORATE SELF INTELLECT

HORIZONTAL
OF REWARD RESOURCE LEARNING FAST TRACKING
MANAGEMENT PROGRAM
SYMBOLIC REPRESENTATION OF Y2K HR FUNCTION WITH COMPETENCIES,
COACHING, CULTURE, BENCHMARKING, EMPOWERMENT, NEW FORMS OF
REWARDS, SELF LEARNING, HR SYSTEMS, KNWOLEDGE MANAGEMENT
AND HORIZONTAL FAST TRACKING AS THE BUILDING BLOCKS AND
MODEL HR ORGANIZATION, GOVERNANCE, ETHICS, RESEARCH,
STRUCTURES, ETYLES, CONSULTING, 21ST CENTURY CORPORATION AND
HR EXCELLENCE AMONGST OTHERS AS THE DIRECTION TO BE TAKEN
CONSTRUCTIVELY IN EVERY ORGANIZATION.

Article by Ganesh Shermon, Chief Executive officer of HR India. Com Private

Limited a B2B web Consulting Company specializing in Knowledge HR products
and Services.

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